IGA-415M: Financing the Clean Energy Transition

Meeting the world’s growing demand for energy while avoiding the most catastrophic impacts of climate change will require a complete replacement of the world’s energy system. At the same time, global events — from Russia’s invasion of Ukraine to political instability in the Middle East — have made energy security a central concern for policymakers and investors alike. Artificial intelligence, powered by energy-hungry data centers, complicates this challenge further.

Although the timing and technology mix of the energy transition remains uncertain, trillions of dollars in new investment will be needed, not only for wind farms, solar projects, and batteries, but for all infrastructure underlying the digital economy. Governments cannot meet these needs alone; private capital will play the decisive role.

This course examines how public policy shapes private investment decisions in the global energy and infrastructure markets. Students will learn to build, understand, and use financial models to see how private investors assess risk and return. These tools will be applied to private sector projects ranging from energy generation and electric vehicles, to AI data centers or resource extraction for precious metals and rare earth mining.

We begin with an overview of the world’s energy needs in light of the clean energy transition, diagnosing where money must be spent, what infrastructure is required, and how much it is likely to cost. Case studies will explore barriers to investment from the perspective of developers, governments, companies, financial firms, and multilateral development banks. The focus will then shift to how policies — such as carbon pricing, subsidy design, energy market reform, or development bank financing — affect financial viability and unlock private capital.